SpaceX listed Grok’s “hot” status as a risk in its IPO filing

SpaceX has warned investors AI features like Grok’s “Spicy” and “Unhinged” modes, which allow the chatbot to create lewd image or audio responses using… Fewer security filterscould expose the company to regulatory scrutiny and reputational damage, according to a filing filed Wednesday as part of The company’s planned initial public offering.

As of December, SpaceX had set aside $530 million for potential litigation losses, some of which could stem from ongoing complaints against its AI unit over sexual images generated by its Grok chatbot.

The disclosures show how SpaceX faced new financial and reputational risks when it did so Acquired Elon Musk’s artificial intelligence startup xAI In February, the deal pushed the rocket maker’s private value to more than $1 trillion. In the filing, SpaceX repeatedly claims that xAI’s mission is to develop “truth-seeking artificial intelligence.” In practice, this has often meant launching AI features with minimal guardrails. While Musk often portrays Grok’s freewheeling nature as a selling point, it has landed XAI in an awkward position with regulators.

Disclosing potential business risks is a routine and legally required part of IPO filings, and some of the concerns SpaceX has articulated may never materialize. The company is one of a number of chatbot manufacturers under scrutiny by regulators as governments grapple with the societal impacts of generative AI tools.

SpaceX revealed in the filing that it is currently under investigation in the United States and other countries over allegations that Grok was used to create what appear to be sexual images of minors. The company also noted that it is a defendant in several ongoing class action lawsuits, and that future “misuse” of its AI products could expose it to further regulatory sanctions, “including loss of access to certain markets, which has happened in the past.”

Some of SpaceX’s AI products, including Grok’s Spicy and Unhinged modes, are “designed to generate output that is more candid or direct or less reserved or disrespectful,” the filing notes. “Because these tactics may be more crude and harsh than our standard offerings, they present increased risks, including reputational damage, generation of potentially explicit content, misleading information or deceptive output, potentially non-consensual or exploitative images, intellectual property infringement, or content that could be deemed exploitative, harmful, harassing, abusive, or discriminatory.”

SpaceX also revealed to investors that Grok and X had about 550 million monthly users combined as of March 31, according to the filing. Of these, 117 million use Grok’s AI features every month. In comparison, OpenAI says ChatGPT has more… 900 million users weekly.

Whether the risks posed by Grok and X are worth it may be one of the important questions investors will have to wrestle with ahead of SpaceX’s IPO. Earlier this week, a group of non-profit organizations warned against this xAI’s poor safety record could become a liability For SpaceX investors.

SpaceX’s AI unit, which includes X and xAI, is a drag on the rest of the company, with operating losses of more than $6.3 billion last year. Advertising, data and subscription sales are increasing, but not at a pace that would quickly make the division profitable. One bright spot for SpaceX’s AI efforts is its deal with Anthropic, which has already It agreed to pay $15 billion annually To access the company’s data centers.